A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article thirty-five,
relating to adoption of a "Patient Protection Act," assuring
fairness and choice to patients and providers under managed
health care benefit plans; short title; purpose;
definitions; certification of managed care plans and
utilization review programs; choice requirements for point
of service plans; choice of health plans for enrollment; and
effective date.

Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article thirty-five, to
read as follows:ARTICLE 35. PATIENT PROTECTION ACT.
§16-35-1. Short title.
This article shall be known and may be cited as "The Patient
Protection Act."§16-35-2. Purpose.
The Legislature hereby finds and declares that:
(a)
As this state's health care market becomes increasingly
dominated by health plans that utilize various managed care
techniques that include decisions regarding coverage and the
appropriateness of health care, it is a vital state governmental
interest to protect patients from unfair managed care practices;
(b)This legislation requires the department of tax and
revenue division of insurance to establish standards for the
certification of qualified managed care plans. Standards are
required to ensure patient protection, to avoid discrimination
against qualified physicians and providers, to establish
utilization review safeguards and to develop coverage options for all patients, including the ability to enroll in a point of
service plan. Patient choice of physicians and other providers
would be enhanced through the availability of a point of service
option for those who elect this added coverage option.§16-35-3. Definitions.
(a)Qualified managed care plan. -- For purposes of this
article, the term "qualified managed care plan" means a managed
care plan that the commissioner certifies, upon application by
the program, as meeting the requirements of this section.
(b)Qualified utilization review program. -- For purposes of
this article, the term "qualified utilization review program"
means a utilization review program that the commissioner
certifies, upon application by the program, as meeting the
requirements of this section.
(c)Utilization review program. -- For purposes of this
article the term "utilization review program" means a system for
reviewing the medical necessity, appropriateness or quality of
health care services and supplies provided under a health
insurance plan or a managed care plan using specified guidelines.
Such a system may include preadmission certification, the application of practice guidelines, continued stay review,
discharge planning, preauthorization of ambulatory procedures and
retrospective review.
(d)Managed care plan. --
(1)In general. -- For purposes of this article the term
"managed care plan" means a restrictive health care plan operated
by a managed care entity as described in subsection (e) of this
section, not including an integrated medical group contracting
with a plan for the direct provision of services to plan
enrollees, that provides for the financing and delivery of health
care services to persons enrolled in such plan through:
(A)Arrangements with selected providers to furnish health
care services;
(B)Explicit standards for the selection of participating
providers;
(C)Organizational arrangements for ongoing quality
assurance, utilization review programs and dispute resolution;
and
(D)Financial incentives for persons enrolled in the plan to
use the participating providers and procedures provided for by the plan.
(e)Managed care entity. -- For purposes of this article, a
managed care entity includes a licensed insurance company,
hospital or medical service plan, health maintenance
organization, an employer or employee organization or a managed
care contractor as described in subsection (f) of this section,
that operates a managed care plan.
(f)Managed care contractor defined. -- For purposes of this
article, a managed care contractor means a person that:
(1)Establishes, operates or maintains a network of
participating providers;
(2)Conducts or arranges for utilization review activities;
and
(3)Contracts with an insurance company, a hospital or
medical service plan, an employer, an employee organization or
any other entity providing coverage for health care services to
operate a managed care plan.
(g)Participating provider. -- The term "participating
provider" means a physician, hospital, pharmacy, laboratory or
other appropriately state-licensed or otherwise state-recognized provider of health care services or supplies, that has entered
into an agreement with a managed care entity to provide such
services or supplies to a patient enrolled in a managed care
plan.§16-35-4. Protection of consumer choice.
(a)Nothing in this article shall be construed as
prohibiting the following:
(1)An individual from purchasing any health care services
with that individual's own funds, whether such services are
covered within the individual's standard benefit package or from
another health care provider or plan.
(2)Employers from providing coverage for benefits in
addition to the comprehensive benefit package.

§16-35-5. Certification of managed care plans and utilization

review programs.
(a)Certification process. --
(1)Certification. -- The commissioner shall establish a
process for certification of managed care plans meeting the
requirements of subdivision (1), subsection (b) of this section,
and of utilization review programs meeting the requirements of
subdivision (2), subsection (b) of this section.
(2)Review and recertification. -- The commissioner shall
establish procedures for the periodic review and recertification
of qualified managed care plans and qualified utilization review
programs. Periodic review and recertification shall include
those managed care plans and utilization review programs which
exist prior to the enactment of this legislation.
(3)Termination of certification. -- The commissioner shall
terminate the certification of a previously qualified managed
care plan or a qualified utilization review program if the
commissioner determines that such plan or program no longer meets
the applicable requirements for certification. Before effecting
a termination, the commissioner shall provide the plan notice and
opportunity for a hearing on the proposed termination.
(4)Certification through alternative requirements. --
(A)Certain organizations recognized. -- An eligible
organization, as defined in section 1876(b) of the Social
Security Act, shall be deemed to meet the requirements of
subsection (b) of this section for certification as a qualified
managed care plan.
(B)Recognition of accreditation. -- If the commissioner finds that a national accreditation body establishes a
requirement or requirements for accreditation of a managed care
plan or utilization review program that are at least equivalent
to a requirement(s) established under subsection (b) of this
section, the commissioner may, to the extent appropriate, treat
a managed care plan or a utilization review program thus
accredited as meeting the requirement(s) of subsection (b) of
this section.
(b)Requirements for certification. --
(1)Managed care plans. -- The commissioner shall establish
standards for the certification of qualified managed care plans
that conduct business in this state, including standards whereby:
(A)Prospective enrollees in health insurance plans must be
provided information as to the terms and conditions of the plan
so that they can make informed decisions about accepting a
certain system of health care delivery. Where the plan is
described orally to enrollees, easily understood, truthful and
objective terms must be used. All plans must provide written
descriptions in a readable and understandable format, consistent
with standards developed for supplemental insurance coverage under Title XVIII of the Social Security Act. This format must
be standardized so that customers can compare the attributes of
the plan. Specific items that must be included are:
(i)Coverage provisions, benefits and any exclusions by
category of service, provider or physician and, if applicable, by
specific service;
(ii)
Any and all prior authorization or other review
requirements including preauthorization review, concurrent
review, postservice review, post payment review and any
procedures that may lead the patient to be denied coverage for or
not be provided a particular service;
(iii)
Financial arrangements or contractual provisions with
hospitals, review companies, physicians or any other provider of
health care services that would limit the services offered,
restrict referral or treatment options or negatively affect the
physician's fiduciary responsibility to his or her patients,
including, but not limited to, financial incentives not to
provide medical or other services;
(iv)Explanation of how plan limitations impact enrollees,
including information on enrollee financial responsibility for payment for coinsurance or other noncovered or out-of-plan
services;
(v)Loss ratios; and
(vi)Enrollee satisfaction statistics (including percent
reenrollment, reasons for leaving plan, etc.).
(B)Plans must demonstrate that they have adequate access to
physicians and other providers, so that all covered health care
services will be provided in a timely fashion. This requirement
cannot be waived and must be met in all areas where the plan has
enrollees, including rural areas.
(C)Plans must meet financial reserve requirements that are
established to assure proper payment for covered services
provided. An indemnity fund should be established to provide for
plan failures even when a plan has met the reserve requirements.
(D)All plans shall be required to establish a mechanism,
with defined rights, under which physicians participating in the
plan provide input into the plan's medical policy, (including
coverage of new technology and procedures), utilization review
criteria and procedures, quality and credentialing criteria, and
medical management procedures.
(E)All plans shall be required to credential physicians
within the plan, and will allow all physicians within the plan's
geographic service area to apply for such credentials. At least
once per year, plans shall notify physicians of the opportunity
to apply for credentials.
(i)Such a credentialing process shall begin upon
application of a physician to the plan for inclusion.
(ii)Each application shall be reviewed by a credentialing
committee with appropriate representation of the applicant's
medical specialty.
(iii)Credentialing shall be based on objective standards of
quality with input from physicians credentialed in the plan, and
such standards shall be available to applicants and enrollees.
When economic considerations are part of the decision, objective
criteria must be used and must be available to applicants,
participating physicians and enrollees. Any economic profiling
of physicians must be adjusted to recognize case mix, severity of
illness, age of patients and other features of a physician's
practice that may account for higher than or lower than expected
costs. Profiles must be made available to those so profiled. When graduate medical education is a consideration in
credentialing, equal recognition will be given to training
programs accredited by the accrediting council on graduate
medical education and by the American osteopathic association.
(iv)To avoid discriminating against enrollees with
expensive medical conditions, plans shall be prohibited from
excluding practitioners with practices containing a substantial
number of such patients.
(v)All decisions shall be made on the record, and the
applicant shall be provided with all reasons used if the
application is denied or the contract not renewed.
(vi)Plans shall not be allowed to include clauses in
physician or other provider contracts that allow for the plan to
terminate the contract "without cause."
(vii)There shall be a due process appeal from all adverse
decisions. The commissioner shall require an approved due
process appeal mechanism.
(viii)
The same standards and procedures used for approving
credentials shall also be used in those cases where the plan
seeks to reduce or withdraw such credentials. Prior to initiation of a proceeding leading to termination of a contract
"for cause," the physician shall be provided notice, an
opportunity for discussion and an opportunity to enter into and
complete a corrective action plan, except in cases where there is
imminent harm to patient health or an action by a state medical
board or other governmental agency that effectively impairs the
physician's ability to practice medicine within the jurisdiction.
(F)Procedures shall be established to ensure that all
applicable federal and state laws designed to protect the
confidentiality of provider and individual medical records are
followed.
(G)Any plan that operates a physician incentive plan must
meet the following requirements:
(i)No specific payment is made directly or indirectly under
the plan to a physician or physician group as an inducement to
reduce or limit medically necessary services provided with
respect to an individual patient;
(ii)If the plan places a physician or physician group at
financial risk for services not provided by the physician or
physician group, the plan provides stop-loss protection for the physician or group that is adequate and appropriate, based on
standards developed by the commissioner, that take into account
the number of physicians placed at such financial risk in the
group or under the plan and the number of individuals enrolled
with the organization who receive services from the physician or
physician group.
(2)Qualified utilization review programs. -- The
commissioner shall establish standards for the certification of
qualified utilization review programs. All plans must have a
medical director responsible for all clinical decisions by the
plan and provide assurances that the medical review or
utilization practices they use, and the medical review or
utilization practices of payers or reviewers with whom they
contract, comply with the following requirements:
(A)Screening criteria, weighing elements and computer
algorithms utilized in the review process and their method of
development must be released to physicians and the public;
(B)Such criteria must be based on sound scientific
principles and developed in cooperation with practicing
physicians and other affected health care providers;
(C)Any person who recommends denial of coverage or payment,
or determines that a service should not be provided, based on
medical necessity standards, must be of the same medical
specialty (specialties as recognized by the American board of
medical specialties or the American osteopathic association) as
the practitioner who prescribed or provided the service;
(D)Each claimant or provider (upon assignment of a
claimant) who has had a claim denied as not medically necessary
must be provided an opportunity for a due process appeal to a
medical consultant or peer review group of the same specialty;
(e) Any individual making a negative judgment or
recommendation about the necessity or appropriateness of services
or the site of service must be a physician licensed to practice
medicine in this state;
(f) The requirement that a representative of the private
review agent is reasonably accessible to patients, patient's
family, and providers at least five days a week during normal
business hours and that payment may not be denied for treatment
rendered during a period when the review agent is not available;
(g) The requirement that no private review agent be permitted to enter a hospital to interview a patient unless
approved in advance by the patient's attending physician and that
the attending physician or a designee be entitled to attend the
interview;
(h) The prohibition of a contract provision between the
private review agent and a business entity or third-party payor
in which payment to the private review agent includes an
incentive or contingent fee arrangement based on the reduction of
health care services, reduction of length of stay, reduction of
treatment, or treatment setting selected;
(i) The requirement that there be nondiscriminatory
utilization review of treatment of all illnesses, without regard
to whether an illness is classified as medical/physical or
mental;
(j) Upon request, physicians will be provided the names and
credentials of all individuals conducting medical necessity or
appropriateness review, subject to reasonable safeguards and
standards;
(k) Prior authorization is not required for emergency care
including a medical screening exam and stabilizing treatment as defined in Section 1867 of the Social Security Act. Any prior
authorization requirement for medically necessary services
arising from such screening exam or stabilizing treatment shall
be deemed to be approved unless a required request is responded
to within two hours. Other patient or physician requests for
prior authorization of a nonemergency service must be answered
within two business days, and qualified personnel must be
available for same-day telephone responses to inquiries about
medical necessity, including certification of continued length of
stay;
(l) In plans where prior authorization is a condition to
coverage of a service, plans must ensure that enrollees are
required to sign medical information release consent forms upon
enrollment for use where services requiring prior authorization
are recommended or proposed by their physician;
(m) When prior approval for a service or other covered item
is obtained, it shall be considered approval for all purposes
related to that service or covered item, and the service shall be
considered to be covered unless there was fraud or incorrect
information provided at the time such prior approval was obtained;
(n) Procedures for ensuring that all applicable federal and
state laws designed to protect the confidentiality of provider
and individual medical records are followed.
(3) Application of standards. --
(A) In general. -- Standards shall first be established
under this subsection by not later than twelve months after the
date of the enactment of this section. In developing standards
under this subsection, the commissioner shall:
(i) Review standards in use by national private
accreditation organizations and the national association of
insurance commissioners;
(ii) Recognize, to the extent appropriate, differences in
the organizational structure and operation of managed care plan;
and
(iii) Establish procedures for the timely consideration of
applications for certification by managed care plans and
utilization review programs.
(B) Revision of standards. -- The commissioner shall
periodically review the standards established under this subsection, and may revise the standards from time to time to
assure that such standards continue to reflect appropriate
policies and practices for the cost-effective and medically
appropriate use of services within managed care plans and
utilization review programs.§16-35-6. Choice requirements for point of service plans.
(a) Choice requirements for point of service plans.
(1) Each sponsor of a health benefit plan that restricts
access to providers, including such plans provided, offer, or
made available by voluntary health purchasing cooperatives,
employers and self-insurers, shall offer to all eligible
enrollees the opportunity to obtain coverage for out-of-network
services through a "point of service" plan, as defined by
subdivision (2) of this section, at the time of enrollment and at
least for a continuous one-month period annually thereafter;
(2) For purposes of this article, an "out-of-network" or
"point of service" plan provides additional coverage and/or
access to care by nonnetwork providers to an eligible enrollee of
a health plan that restricts access to items and services
provided by a health care provider who is not a member of the plan's provider network, as defined in subdivision (3) of this
subsection, or, that may cover any other services the enrollee
seeks, whether such services are provided in or outside of the
enrollee's plan;
(3) A "provider network" means, with respect to a health
plan that restricts access, those providers who have entered into
a contract or agreement with the plan under which such providers
are obligated to provide items and services in the standard
benefits package to eligible individuals enrolled in the plan, or
who have an agreement to provide services on a fee-for-service
basis;
(4) Premiums. -- A plan may charge an enrollee who opts to
obtain point of service coverage an alternative premium that
takes into account the actuarial value of such coverage;
(5) Copayments. -- A point of service plan may require
payment of coinsurance for an out-of-network item or service, as
follows:
(A) The applicable coinsurance percentage shall not be
greater than twenty percent of payment for items and services;
and
(B) The applicable coinsurance percentage may be applied
differentially with respect to out-of-network items and services,
subject to the requirements of subparagraph (i).
(6) Payment disclosure requirement. -- All sponsors of point
of service plans and physicians participating in such plans shall
be required to disclose their fees, applicable payment schedules,
coinsurance requirements or any other financial requirements that
affect patient payment levels.§16-35-7. Choice of health plans for enrollment.
(a) In general. -- Each sponsor of a health benefit plan
who offers, provides or makes available such benefit plan,
including voluntary health insurance purchasing cooperatives,
employers and self-insurers, must provide to each eligible
enrollee a choice of health plans among available plans.
(b) Offering of plans by voluntary health insurance
purchasing cooperatives, employers and other sponsors. --
(1) In general. -- Each voluntary health insurance
purchasing cooperative, employer or other sponsor shall include
among its health plan offerings at least one of each of the
following types of health benefit plans, where available:
(A) A health maintenance organization or preferred provider
organization;
(B) A traditional insurance plan, as defined in subdivision
(2) of this subsection;
(C) A benefit payment schedule plan, as defined in
subdivision (3) of this subsection; and
(D) Medical savings accounts.
(2) Traditional insurance plan defined. -- For purposes of
this article, the term "traditional insurance plan" is defined to
include those plans that offer the standard benefits package that
pay for medical services on a fee-for-service basis using a
usual, customary or reasonable payment methodology or a resource
based relative value schedule, usually linked to an annual
deductible and/or coinsurance payment on each allowed amount.(3) Benefit payment schedule plan defined. --
(A) In general. -- For purposes of this article, the term
"benefit payment schedule plan" means a health plan that:
(i) Provides coverage for all items and services included in
the standard benefit package that are furnished by any lawful
health care provider of the enrollee's choice, within the scope of state licensure;
(ii) Makes payment for the services of a provider on a
fee-for-service basis without regard to whether or not there is
a contractual arrangement between the plan and the provider;
(iii) Provides a benefit payment schedule that identifies
covered services and the payment for each service covered by the
plan. No copayments or coinsurance shall be applied. The plan
shall reimburse the enrollee the payment unless the individual
authorizes direct payment to the provider.

NOTE: The purpose of this bill is to create a patient
protection act for enrollees of managed health care plans.
It requires the insurance commissioner to promulgate rules that
would establish certain standards to ensure patient protection,
physician credentialing, utilization review safeguards and
coverage options, including point-of-service plans.

This article is new; therefore, strike-throughs and
underscoring have been omitted.